A doctorate in political science does not

mean you are an economist. It also seems it does not mean you are intelligent or able to listen to advice from people who do understand economics. The Treasurer in Downunder's national parliament is one such man.

The government has a big problem. The country is in debt, far too much debt. We are not in the happy financial situation many people believe. There is a debt which will have to be paid. If it is not paid by current generations then it will need to be paid by future generations.  It has another big problem. It has to pay for the day-to-day running of the country. There is a third problem and that is that they need to at least look as if they are carrying out the costly election promises they made.

There are other economic problems of course, many of them. Not the least of these is one of the most clumsy and complex tax systems in the world. It is extraordinarily difficult and expensive to run our taxation system. It is also highly inefficient.

So why on earth would you add to the complexity of the system? This is just what our Treasurer is planning to do. It is a plan of such extraordinary stupidity that it is difficult to believe he can even consider it. 

What it amounts to is a system of double taxation on what he claims will be a "very small" number of people, those with superannuation balances over $3m. That may seem a great deal to those whose superannuation balances are well under the million mark. Mine is so far below even that I am, short of someone else buying me a winning lottery ticket, never going to see a million dollars anywhere. It would be nice but it is not going to happen. 

For some other people however it is going to be different, very different. Superannuation contributions are compulsory for both employee and employer. They are taxed. There is, rightly, an expectation that once you have paid tax you should not need to pay tax again. If your assets increase in value but you have not divested yourself of them then why should you suddenly be required to pay tax on that increased value?

Apparently the government, or at least the Treasurer and Cabinet, believe this is perfectly fair and reasonable. It does not affect them in anyway. Our Constitution does not allow them to be taxed in this way. Yes, this is correct. The rest of us are subject to different rules. 

The legislation to do this has not yet passed parliament. It will get through. The government has the numbers in the lower house and they will have the support of the very socialist Greens in the Senate. Once it has been passed it is going to be very difficult, perhaps impossible, to dismantle.  They are not even proposing to "index" it so more and more people are going to get caught up in this. 

Yes, it is a "wealth" tax and many people will, as they believe it will never affect them, see it as fair and reasonable. They will see it as "make the rich pay". I am no economist but I suspect that this is not going to work. It will create a great deal of work, especially for those who have the task of auditing the value of our assets, but it may not bring in the riches the government believes even if it is not indexed. People will find other ways, even legal ways, of hiding their assets. Having already paid tax on them once perhaps they cannot be blamed?